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Additionally, from what I've figured from the media reports on this, it's not just about this retroactive tax demand. It's also about the level of tax they wil

Additionally, from what I've figured from the media reports on this, it's not just about this retroactive tax demand. It's also about the level of tax they will have to pay going forward, which appears to be stupendously height (at least for freelancers). It appears on par with, or even higher than, what people with regular employment often pay, in countries with elaborate and functioning social security/welfare systems. Serbia certainly does not appear to have those. It does appear as if this government really does not want freelancing to be a viable option. Considering the recent efforts to attract foreign investments into local Serbian (tech) companies, where almost insane return-on-investments figures are being promised (of course flowing back to the foreign investors), with all kind of questionable perks (pretty much destroying any potential competition from local businesses), it's not impossible that there is an orchestrated scheme going on here. It sadly would not be a new phenomenon if/when in Serbia a small group of shot-callers are manipulating anything and everything to just enrich themselves, by collaborating with questionable (and ultimately abusive/destructive) foreign enterprises, at the expense of Serbia's citizens and in fact the country as a whole. But, we'll see what happens.

levosmetalo 5y ago
> It does appear as if this government really does not want freelancing to be a viable option. This is the key. Freelancers earning their living on the internet are not inherently dependent on government and are much more likely to support opposition and fight back against the corrupt government. It's easy to control people working in overblown administration or public/government sector, or in companies working for them, but controlling free financially independent people not afraid of dying of hunger if they oppose is not that easy.
- necovek 5y ago
  Corruption and incompetence have been the "standard" of the Serbian administration for a long time, regardless of the political party in power. The current goverment is just milking the ones caught breaking the law because of the economy being cash-strapped and well... because they can! I still think it should be fair to offer them the best terms under which they could have incorporated (eg. for anyone with under 4.500 EUR a month it'd be self-employment with fixed rate taxation that was available to anyone), but to pretend that protesting freelancers were not breaking the law is dishonest imo.
necovek 5y ago
> It's also about the level of tax they will have to pay going forward, which appears to be stupendously height (at least for freelancers). It appears on par with, or even higher than, what people with regular employment often pay, That's not true either. Proposed changes (not accepted by the protesters) are to consider 43% of income as non-taxable personal deductions (up from 20% in the existing law, though actual, receipt-backed deductions for performance of work are accepted), and then pay the regular tax percentages that employees pay, except that Serbian law splits the employer and employee obligations for employees, but charges the sum total of those tax rates in percentage points to freelancers (eg. see the numbers on https://taxsummaries.pwc.com/serbia/individual/other-taxes https://taxsummaries.pwc.com/serbia/individual/other-taxes — so freelancers would pay 25.5% of the taxable income into the pension fund). A total cost of a single employee for an employer is considered a gross contractual salary (out of which employee taxes are paid from the link above) + employer taxes on top. So because of the slightly lower "base" calculations are done on, actual percentages are slightly lower for employees, but it was basically negated with the 20% deduction. With a 43% deduction, freelancers get to pay fewer taxes than state gets for a single employee for the same net salary. Eg. if a freelancer ends up with 100k RSD after all taxes, state gets 36k RSD in total taxes: 36k out of 136k gross is not "stupendous" at all! An employee receiving a net 100k RSD salary, state gets around 66k RSD in taxes. If existing law was upheld, it would be around 60k RSD for freelancers (iow, much closer to what employees are paid for).
- elmo2you 5y ago
  I'm not quite sure what you are trying to get at. It appears you are explaining how the Serbian government wants to tax freelancers as if they would have been regular employees. Which other country does that? Where do self-employed people (freelancers) get taxed as if they are employees? This assumption appears to be underpinning your whole comparison/explanation. Where did you get this assumption of "freelancer should be treated as employee" (as far as taxing goes) come from? If it wasn't clear from my original sentence, I meant that this tax rate for freelancers is on par with what employees in OTHER countries often pay (if not higher). But I honestly don't know a single country that taxes freelancers as if they are regular employees. Could you give me examples of other countries that do this, and what the rational behind such an unusual approach might be?

levosmetalo 5y ago

> It does appear as if this government really does not want freelancing to be a viable option. This is the key. Freelancers earning their living on the internet are not inherently dependent on government and are much more likely to support opposition and fight back against the corrupt government. It's easy to control people working in overblown administration or public/government sector, or in companies working for them, but controlling free financially independent people not afraid of dying of hunger if they oppose is not that easy.

necovek 5y ago
Corruption and incompetence have been the "standard" of the Serbian administration for a long time, regardless of the political party in power. The current goverment is just milking the ones caught breaking the law because of the economy being cash-strapped and well... because they can! I still think it should be fair to offer them the best terms under which they could have incorporated (eg. for anyone with under 4.500 EUR a month it'd be self-employment with fixed rate taxation that was available to anyone), but to pretend that protesting freelancers were not breaking the law is dishonest imo.

necovek 5y ago

> It's also about the level of tax they will have to pay going forward, which appears to be stupendously height (at least for freelancers). It appears on par with, or even higher than, what people with regular employment often pay, That's not true either. Proposed changes (not accepted by the protesters) are to consider 43% of income as non-taxable personal deductions (up from 20% in the existing law, though actual, receipt-backed deductions for performance of work are accepted), and then pay the regular tax percentages that employees pay, except that Serbian law splits the employer and employee obligations for employees, but charges the sum total of those tax rates in percentage points to freelancers (eg. see the numbers on https://taxsummaries.pwc.com/serbia/individual/other-taxes https://taxsummaries.pwc.com/serbia/individual/other-taxes — so freelancers would pay 25.5% of the taxable income into the pension fund). A total cost of a single employee for an employer is considered a gross contractual salary (out of which employee taxes are paid from the link above) + employer taxes on top. So because of the slightly lower "base" calculations are done on, actual percentages are slightly lower for employees, but it was basically negated with the 20% deduction. With a 43% deduction, freelancers get to pay fewer taxes than state gets for a single employee for the same net salary. Eg. if a freelancer ends up with 100k RSD after all taxes, state gets 36k RSD in total taxes: 36k out of 136k gross is not "stupendous" at all! An employee receiving a net 100k RSD salary, state gets around 66k RSD in taxes. If existing law was upheld, it would be around 60k RSD for freelancers (iow, much closer to what employees are paid for).

elmo2you 5y ago
I'm not quite sure what you are trying to get at. It appears you are explaining how the Serbian government wants to tax freelancers as if they would have been regular employees. Which other country does that? Where do self-employed people (freelancers) get taxed as if they are employees? This assumption appears to be underpinning your whole comparison/explanation. Where did you get this assumption of "freelancer should be treated as employee" (as far as taxing goes) come from? If it wasn't clear from my original sentence, I meant that this tax rate for freelancers is on par with what employees in OTHER countries often pay (if not higher). But I honestly don't know a single country that taxes freelancers as if they are regular employees. Could you give me examples of other countries that do this, and what the rational behind such an unusual approach might be?